Venture capital firms are showing increasing interest in crypto startups, with investments increasing significantly in February.
Citing data from DefiLlama, CryptoBriefing reported that crypto startups received $485 million in funding last month, an increase of 5.3% month-on-month and the highest investment amount in the previous quarter.
The bulk of the capital, amounting to $387 million, was allocated to infrastructure startups. The most notable investment was made by a16z, who injected $100 million into AigenLayer during a private funding round. This was the largest venture capital allocation to a crypto startup in February.
EtherFi, a liquid staking platform, also secured a notable $27 million investment in its Series A round. This round was led by Bullish and CoinFund.
Additionally, payments platform Oobit has successfully closed its Series A funding round, receiving $25 million. The round was led by Tether and CMCC Global.
Decentralized finance (DeFi) projects attracted over $48 million in investments during the same period. Superform Labs aims to develop a universal yield market and has raised $6.5 million in a seed round led by Polychain Capital.
Omega’s effort to build a DeFi ecosystem on top of Bitcoin has received $6 million in a private round with contributions from Borderless Capital and Blockchain.com.
The Web3-focused application also attracted investor interest, securing about $18 million in February. Beoble, who is working on the Web3 messaging app and social platform, received his largest investment in the space, $7 million, from companies such as Samsung Next and Hashkey Capital.
The gaming sector was not left out either, with $33 million directed towards new game studios. His game studio Helika has raised his $8 million Series A round led by Pantera Capital. Another important investment of his was his Web3 game Pixelmon, for which he raised $8 million from Animoca Ventures and Delphi Ventures.
In early September, Colleen Sullivan of Brevan Howard Asset Management's crypto venture division acknowledged the potential of blockchain technology in gaming.
However, he also pointed to current limitations, particularly the throughput of networks like Solana, which can only process about 2,000 transactions per second. According to Sullivan, this capacity is considered insufficient to host high-quality gaming experiences on-chain.
Despite strong activity in February, the broader picture from October's PitchBook data shows that investment in the crypto market is slowing.
In the third quarter of 2023, venture capitalists invested $2 billion in cryptocurrencies, which is a 63% decrease compared to the same period in 2022. As PitchBook analyst Robert Lee points out, this decline in funding levels is due to smaller deal sizes. .
